ABA Statement on CFPB’s Final Arbitration Rule

By Rob Nichols, ABA president and CEO

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“We’re disappointed that the CFPB has chosen to put class action lawyers – rather than consumers – first with today’s final rule. Banks resolve the overwhelming majority of disputes quickly and amicably, long before they get to court or arbitration. The Bureau’s own study found that arbitration has significant benefits over litigation in general and class actions in particular. Arbitration is a convenient, efficient and fair method of resolving disputes at a fraction of the cost of expensive litigation, which helps keep costs down for all consumers.

“Consumers also fare better in arbitration – the Bureau’s study found that consumers receive $5,389 on average compared to $32.35 in litigation. Consumers receive nothing at all in nearly nine out of 10 class action lawsuits.

“Despite acknowledging these benefits in its own study, the Bureau has chosen to write a rule that would essentially eliminate arbitration – and force consumers into court – by requiring companies to face a flood of attorney-driven class action lawsuits from which consumers receive virtually nothing. Under this final rule, consumers lose.

“As Congress considers changes to the CFPB’s structure and accountability, we also urge lawmakers to overturn this rulemaking.”

The American Bankers Association is the voice of the nation’s $17 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $13 trillion in deposits and extend more than $9 trillion in loans.